When will the IRS issue a Tax Lien and under what circumstances will they release the Tax Lien?
When will the IRS issue a Tax Lien?
Generally speaking, when a taxpayer owes the IRS in back taxes, and the Taxpayer makes little or no attempt to settle or negotiate a payment plan, the IRS has the right to file a Federal Tax Lien (to protect its interest in the amount of the Tax Liability).
Why does the IRS issue a Federal Tax Lien?
A Federal Tax Lien gives the IRS a “priority on your real and personal property against all other creditors and furthermore, it provides them the right to seize property subject to prior encumbrances.”
When will the IRS remove a Tax Lien?
The IRS will release a Federal Tax Lien when the tax liability related to the Tax Lien is fully satisfied. The IRS will release the tax lien within 30 days after full payment or immediately if paid in cash or the equivalent of cash. A Federal Tax Lien can also be released if any of the following circumstances applies:
1.The lien was filed not in accordance with IRS regulations.
2.The release of lien would speed up the actual collection process.
3.The IRS determines it is in their best interest and the taxpayers.